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Sim-only tariffs: how I saved £234 on my mobile bill

Emma Lunn
by Lovemoney Staff Emma Lunn on 15 April 2012  |  Comments 11 comments

As new research suggests we are wasting £5 billion a year as a result of being on the wrong tariff, Emma Lunn looks at how she managed to slash her own mobile costs

Sim-only tariffs: how I saved £234 on my mobile bill

We are wasting the best part of £5 billion a year as a result of not being on the right mobile phone tariff for our use, new research from Carphone Warehouse suggests.

Its research found that on average being on the wrong tariff costs each person £194 a year.

It’s not surprising that mobile users are getting it wrong when you consider that there are more than seven million mobile phone deals on offer in the UK.

You read that right, seven million. That’s a lot of searching and comparing to do if you want to find the best tariff for your needs.

The staggering figure has been fuelled by the recent rise in smartphones with internet access - which has added an additional layer of complexity to the already baffling arena of mobile tariffs.

My mobile bill

I recently came to the end of a two-year iPhone contract with O2 costing £30 a month, which gave me 300 minutes a month, unlimited texts and unlimited internet.

I was happy with my existing iPhone with no urge to upgrade it to the latest all-singing, all-dancing version, so I decided to opt for a SIM-only tariff. And because I was also happy with O2’s coverage in my flat and local area I decided to stick with O2 rather than risk switching to a network that might have blackspots where I live.

O2’s Simplicity tariffs are SIM-only meaning you just get a SIM card and you provide the handset yourself.

The cheapest Simplicity deal offered 300 minutes a month, unlimited texts and 100MB of data for £10.50 a month – so almost identical to what I had before for £30 a month except the data allowance. A quick check of my bill confirmed that I usually use no more than 25MB of data a month so 100MB looks more than enough.

So I’m saving £19.50 a month, or £234 a year, and not much has changed: same phone and a near-identical tariff.

Why are SIM-only deals so cheap?

Traditionally mobile phone firms offer contracts that include a handset and a set number of call minutes and texts each month for a monthly fee. Handsets are the expensive part of the deal for networks, so by offering SIM-only deals they can offer much cheaper tariffs.

Another advantage of SIM-only deals is that in some cases you only have to commit to a minimum of a month or 12 months rather than 18 or 24 months as required by most handset-included deals.

Potential downsides

The obvious downside to SIM-only deals is that you have to provide your own handset. You’ll also need to make sure the handset is not locked on to a particular network. If it is – and you want to use a SIM card from a different network – you can pay to have it unlocked.

If you have a SIM-only deal and your handset breaks down, it will be up to you to buy another one, whereas if you’re on a contract and the handset breaks down you can usually ask the retailer or network to repair it.

Saying that, don’t assume all handsets that form part of a mobile contract will last as long as the contract. iPhones, for example, are regularly sold on two-year contracts, yet Apple offers just a one-year guarantee.

What do the other networks offer?

There are some real bargains around if you’re happy to go SIM-only. Here are a handful of the best:

For £7 a month Orange will give you 150 minutes, 500 texts and 500MB of data on a 12-month deal.

For £8 a month Vodafone offers 300 minutes and unlimited texts but no data on a 12 month contract, or 100 minutes, unlimited texts and 100MB of data on a three-month deal.

For £10 a month Three will give you 300 minutes, 3,000 texts and 1GB of data on a 12-month contract while if you just want to commit for one month it will give you 100 minutes, 3,000 texts and 1GB of data for the same price.

Compare mobile phone deals at Recombu

More on mobile phones:

Which mobile phone insurer is the best value?

Avoid this mobile phone bill shock

Landline vs. mobile: time to ditch the home phone?

Cheapest ways to use mobile broadband abroad

Call 0800, 0808 and 0870 numbers for free from your mobile

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Comments (11)

  • SteveJRBailey
    Love rating 0
    SteveJRBailey said

    I agree with SuBo. GiffGiff is by far the cheapest. They also have an Auto-Top-Up on Pay-as-you-go feature for low usage users, that allows almost contract cover but without the risk of runaway charges.

    And GiffGaff is actually an O2 company using their network.

    Join today: http://giffgaff.com/orders/affiliate/nitrosqueeze

    Report on 20 April 2012  |  Love thisLove  0 loves
  • traveler
    Love rating 0
    traveler said

    several notes:

    "Apple offers just a one-year guarantee":

    Except that they recently had to agree to the EU 2 year warranty directive.

    on the positive side, they are the only supplier/shop that for 140 pounds will exchange your broken/water damaged etc iPhone for a completely new manufacturer sealed and guaranteed one.

    Have not found Samsung, HTC, Sony etc offering the same.

    Contract warranty:

    It raises an interesting issue.

    There is a widespread story that the phone shops perpertuate, that despite being sold goods and services on a 18/24/36 month contract your phone is only guaranteed for faults for the 1st 12 months (not even the contact length that it should be).

    And that all ignores UK sale of goods act (reasonable life), let alone EU (2 yr) law

    rolling your contract on at the end.

    You do need to take action even for SIM only at the end of a contract.

    I had a contract for 15 pounds/month with a phone (so some 10 pounds/mnt for that) but at the end it jumped to 26 pounds !! (sorry?). Yes, amazingly end of contract the took away a 10 pound contract length only discount even though I was not now paying for a phone (a double penalty !) - no letter of warning I was comming to the end of my contract.

    The poor guy on the help line, apologised but could do nothing unless I signed for new "with phone" contract for less than a SIM only deal - go figure.

    some companies dont understand genuine loyalty

    - often cheaper to get a with phone contract and sell the phone

    than a SIM only for the same mins/txt/ data !

    Wifi Tethering:

    All those Data allowances (unles you are on an O2 "contract") are for phone use only. There are only 2 contracts currentty that offer wifi (or USB) tethering in the deal. The full Monty from t-mobile and the One Plan (available on a 30 day SIM) from THREE.

    O2 include tethering in their much more limited data allowances as standard on contract (but not PAYG).

    Report on 14 July 2012  |  Love thisLove  0 loves

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